LLOYDS BANK STILL SEES "STRONG POTENTIAL" IN BANCASSURANCE MARKET

UK-based Lloyds Banking Group said Friday morning that it still saw "strong potential" in the bancassurance market, and continues to maintain "a strong advisor force" within branches to serve the insurance needs of customers. It also said that it would use the experience "to expand in other core customer insurance needs such as commercial insurance". The bank reasserted its commitment to selling insurance at the same time as reporting a further £1.5bn ($2.28bn) in provision for the misselling of payment protection insurance (PPI), bringing the total for the year to £3.575bn and the complete total to £6.775bn. Total costs incurred to the end of 2012 were £4.344bn. In general insurance (mainly home and life protection linked to the bank's retail mortgage business) the bank's total income was £937m, down from £1.03bn in 2011. The underlying profit fell to £409m from £497m. Home insurance income was roughly in line with 2011, while claims were up by £22m, or 6%, because of the adverse weather events of 2012. Weather-related claims were £110m, some £95m higher than in 2011. However, underlying home claims fell, attributed by the bank to an improved claims management process. The combined ratio was 72%. The total insurance numbers, including life, pensions & investment, saw total income decline to £2.22bn from £2.62bn, with underlying profit falling to £1.11bn from £1.46bn. The 19% decline was attributed largely to a subdued economic climate and the rise in property claims. Partially offsetting this was an 8% cut in costs.